Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings. However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.

Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are three small-cap stocks to pass on and some alternatives you should look into instead.

Saia (SAIA)

Market Cap: $9.63 billion

Pivoting its business model after realizing there was more success in delivering produce than selling it, Saia (NASDAQ: SAIA) is a provider of freight transportation solutions.

Why Are We Wary of SAIA?

1. Underwhelming tons shipped over the past two years imply it may need to invest in improvements to get back on track
2. Earnings per share have dipped by 16.3% annually over the past two years, which is concerning because stock prices follow EPS over the long term
3. Diminishing returns on capital suggest its earlier profit pools are drying up

Saia’s stock price of $361.71 implies a valuation ratio of 28x forward P/E. To fully understand why you should be careful with SAIA, check out our full research report (it’s free).

AAON (AAON)

Market Cap: $7.39 billion

Backed by two million square feet of lab testing space, AAON (NASDAQ: AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings.

Why Does AAON Fall Short?

1. Incremental sales over the last two years were much less profitable as its earnings per share fell by 18.7% annually while its revenue grew
2. Cash-burning history and the downward spiral in its margin profile make us wonder if it has a viable business model
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $91.50 per share, AAON trades at 38.7x forward P/E. Read our free research report to see why you should think twice about including AAON in your portfolio.

TPG (TPG)

Market Cap: $8.09 billion

Founded in 1992 and managing over 300 active portfolio companies across more than 30 countries, TPG (NASDAQ: TPG) is a global alternative asset management firm that invests across private equity, credit, real estate, and public market strategies.

Why Does TPG Give Us Pause?

1. Earnings growth over the last four years fell short of the peer group average as its EPS only increased by 7% annually

TPG is trading at $48.53 per share, or 14.9x forward P/E. Check out our free in-depth research report to learn more about why TPG doesn’t pass our bar.

Stocks We Like More

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.